BOARD CERTIFICATION EXAM STUDY GUIDES Lower Extremity Trauma
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Posted on June 24, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By AI
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Stocks: Markets rose tentatively to start the week after the US bombed three nuclear facilities in Iran over the weekend. The rally gained steam in the afternoon after Iran launched a missile strike against a US airbase in Qatar, leaving no US casualties and keeping a path to de-escalation intact.
Safe havens: The US dollar rose to its highest level in nearly a month this morning, up from a three-year low last week, as investors sought safety. Meanwhile, gold inched higher despite pressure from a stronger dollar, a sure sign of investor tension.
Crypto: Bitcoin fell dangerously close to the key support level of $100,000 before recovering later in the day as traders took a risk-on stance.
Posted on June 24, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By A.I.
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Markets: Stocks climbed yesterday as oil prices fell, with investors reacting positively to what appeared to be limited retaliation from Iran in response to the US bombing its nuclear facilities over the weekend.
Meanwhile, Tesla had its biggest jump in two months following the successful, albeit limited, rollout of its robotaxi service in Austin.
Posted on June 24, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
Tesla climbed 8.23% thanks to a successful robotaxi debut in Austin this weekend
NorthernTrust popped 8.01% on reports that Bank of New York Mellon is considering acquiring the financial services company.
The stablecoin adoption wave continues to hit markets, with Fiserv up 4.38% after announcing it made deals with Circle and PayPal to roll out a stablecoin and digital-asset platform for banking clients. Circle climbed another 9.64%.
Nuclear energy stocks climbed on the news that New York will build the first major new US nuclear plant in more than 15 years. ConstellationEnergy rose 3.37%, while CentrusEnergy climbed 1.16% and UraniumEnergy gained 2.01%.
SpartanNash exploded 50.62% higher after C&S Wholesale Grocers agreed to acquire the wholesale grocer for $1.77 billion.
What’s down
Tough first day at work: Stellantis sank 0.48% on the day that new CEO Antonio Filosa took the helm at the struggling automaker.
NovoNordisk lost 5.49% after the pharma giant announced disappointing trial results for its newest weight-loss drug.
Super Micro Computer fell 9.77% on the news that it will raise money by offering $2 billion in convertible senior notes.
Wolfspeed plummeted 31.85% after the chipmaker said it plans to file for bankruptcy.
Although many academics argue that value stocks outperform growth stocks, the returns for individuals investing through mutual funds demonstrate a near match.
Introduction
A 2005 study Do Investors Capture the Value Premium? written by Todd Houge at The University of Iowa and Tim Loughran at The University of Notre Dame found that large company mutual funds in both the value and growth styles returned just over 11 percent for the period of 1975 to 2002. This paper contradicted many studies that demonstrated owning value stocks offers better long-term performance than growth stocks.
The studies, led by Eugene Fama PhD and Kenneth French PhD, established the current consensus that the value style of investing does indeed offer a return premium. There are several theories as to why this has been the case, among the most persuasive being a series of behavioral arguments put forth by leading researchers. The studies suggest that the out performance of value stocks may result from investors’ tendency toward common behavioral traits, including the belief that the future will be similar to the past, overreaction to unexpected events, “herding” behavior which leads at times to overemphasis of a particular style or sector, overconfidence, and aversion to regret. All of these behaviors can cause price anomalies which create buying opportunities for value investors.
Another key ingredient argued for value out performance is lower business appraisals. Value stocks are plainly confined to a P/E range, whereas growth stocks have an upper limit that is infinite. When growth stocks reach a high plateau in regard to P/E ratios, the ensuing returns are generally much lower than the category average over time.
Moreover, growth stocks tend to lose more in bear markets. In the last two major bear markets, growth stocks fared far worse than value. From January 1973 until late 1974, large growth stocks lost 45 percent of their value, while large value stocks lost 26 percent. Similarly, from April 2000 to September 2002, large growth stocks lost 46 percent versus only 27 percent for large value stocks. These losses, academics insist, dramatically reduce the long-term investment returns of growth stocks.
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However, the study by Houge and Loughran reasoned that although a premium may exist, investors have not been able to capture the excess return through mutual funds. The study also maintained that any potential value premium is generated outside the securities held by most mutual funds. Simply put, being growth or value had no material impact on a mutual fund’s performance.
Listed below in the table are the annualized returns and standard deviations for return data from January 1975 through December 2002.
Index Return SD
S&P 500 11.53% 14.88%
Large Growth Funds 11.30% 16.65%
Large Value Funds 11.41% 15.39%
Source: Hough/Loughran Study
The Hough/Loughran study also found that the returns by style also varied over time. From 1965-1983, a period widely known to favor the value style, large value funds averaged a 9.92 percent annual return, compared to 8.73 percent for large growth funds. This performance differential reverses over 1984-2001, as large growth funds generated a 14.1 percent average return compared to 12.9 percent for large value funds. Thus, one style can outperform in any time period.
However, although the long-term returns are nearly identical, large differences between value and growth returns happen over time. This is especially the case over the last ten years as growth and value have had extraordinary return differences – sometimes over 30 percentage points of under performance.
This table indicates the return differential between the value and growth styles since 1992.
YEARLY RETURNS OF GROWTH/VALUE STOCKS
Year
Growth
Value
1992
5.1%
10.5%
1993
1.7%
18.6%
1994
3.1%
-0.6%
1995
38.1%
37.1%
1996
24.0%
22.0%
1997
36.5%
30.6%
1998
42.2%
14.7%
1999
28.2%
3.2%
2000
-22.1%
6.1%
2001
-26.7%
7.1%
2002
-25.2%
-20.5%
2003
28.2%
27.7%
2004
6.3%
16.5%
2005
3.6%
6.1%
2006
10.8%
20.6%
2007
8.8%
1.5%
2008
-38.43%
-36.84%
2009
37.2%
19.69%
2010
16.71%
15.5%
2011
2.64%
0.39%
2012
15.25%
17.50%
Source: Ibbottson.
Between the third quarter of 1994 and the second quarter of 2000, the S&P Growth Index produced annualized total returns of 30 percent, versus only about 18 percent for the S&P Value Index. Since 2000, value has turned the tables and dramatically outperformed growth. Growth has only outperformed value in two of the past eight years. Since the two styles are successful at different times, combining them in one portfolio can create a buffer against dramatic swings, reducing volatility and the subsequent drag on returns.
Assessment
In our analysis, the surest way to maximize the benefits of style investing is to combine growth and value in a single portfolio, and maintain the proportions evenly in a 50/50 split through regular rebalancing. Research from Standard & Poor’s showed that since 1980, a 50/50 portfolio of value and growth stocks beats the market 75 percent of the time.
Conclusion
Due to the fact that both styles have near equal performance and either style can outperform for a significant time period, a medical professional might consider a blending of styles. Rather than attempt to second-guess the market by switching in and out of styles as they roll with the cycle, it might be prudent to maintain an equal balance your investment between the two.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit a RFP for speaking engagements: MarcinkoAdvisors@outlook.com
Posted on June 21, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By AI
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Stocks: Markets kicked off Friday trading on a high note thanks to comments from Federal Reserve Governor Christopher Waller that the central bank could lower interest rates as soon as next month.
Commodities: Oil prices tumbled at the open after President Trump pushed back his decision to involve the US in the conflict between Israel and Iran by two weeks.
Trade: Stocks gave up their early gains on reports that Japan has canceled high-level meetings with the US after President Trump told the country to spend more on defense.
Posted on June 20, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By AI
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Stocks: Investors looked past the escalating conflict between Iran and Israel, even as President Trump mulled his options for a US intervention, and stocks rose ahead of today’s Federal Reserve meeting.
Economy: Trump called Jerome Powell “a stupid person” hours before the Fed Chair decided to keep interest rates where they were Stocks fell thanks to the Fed’s prediction that inflation will rise to 3.1% by the end of the year, above previous forecasts of 2.8%.
Commodities: Gold fell just a hair as analysts called the commodity’s top, while platinum climbed to a four-year high.
Posted on June 18, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
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Stocks: Markets sagged as fighting between Israel and Iran continued, with investors worried about escalation after President Trump called for the “unconditional surrender” of Iran’s Supreme Leader Ali Khamenei. The Wall Street Journal reported that he is considering a potential US strike against Iran.
Commodities: Oil prices popped this morning after Trump warned that Tehran should be evacuated.
Bonds: Yields sank after US retail sales came in much lower than anticipated, raising fears of an economic slowdown.
Correlation measures the relationship between two investments–the higher the correlation, the more likely they are to move in the same direction for a given set of economic or market events. Correlation, in the finance and investment industries, is a statistic that measures the degree to which two securities move in relation to each other. Correlations are used in advanced portfolio management, computed as the correlation coefficient which has a value that must fall between -1.0 and +1.0.
So if two securities are highly positively correlated, they will move in the same direction the vast majority of the time. Negatively correlated investments do the opposite–as one security rises, the other falls, and vice versa. No correlation means there is no relationship between the movement of two securities–the performance of one security has no bearing on the performance of the other.
Correlation is an important concept for portfolio diversification--combining assets with low or negative correlations can improve risk-adjusted performance over time by providing a diversity of payouts under the same financial conditions.
Posted on June 17, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By AI
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Stocks: Israel and Iran exchanged missile strikes for a fourth day, but investors are betting that the conflict will remain at least somewhat contained. Reports that Iran wants to de-escalate the conflict and even restart nuclear talks seemed to underline that idea, and markets rose strongly throughout the afternoon.
Commodities: Gold fell as hopes of a ceasefire between Israel and Iran made investors more bullish, while Iranian oil infrastructure was spared from the attacks, pushing crude prices lower.
Bonds: A $13 billion 20-year bond auction this afternoon yielded strong demand, rounding out a series of solid auctions over the last few days that seemingly point to renewed investor confidence in US fixed income.
Posted on June 17, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
Stat: 2%. That’s the portion of Medicaid expansion enrollees who were either not working or in school due to “lack of interest” in finding a job. (Robert Wood Johnson Foundation)
Quote: “It’s just devastating. So much human toil has gone into this. Just when it looked like we could beat this virus, we’re going to give up.”—Dennis Burton, a Scripps Research Institute immunologist, on how a new HIV vaccine was about to start clinical trials before federal funding cuts (NPR)
Read: A look at HHS Secretary RFK Jr.’s new appointees to the CDC vaccine advisory panel. (Stat)
The wait is finally over: USSteel climbed 5.10% after President Trump signed an executive order approving its takeover by Nippon Steel.
Roku jumped 10.43% after announcing a partnership with Amazon that gives advertisers the ability to reach roughly 80% of American households with connected TVs.
AdvancedMicroDevices rose 8.81% on an upgrade from Piper Sandler analysts, who think the semi stock’s AI business will boom.
EchoStar exploded 49.11% after Trump pushed the FCC to resolve its ongoing spectrum dispute with the satellite company.
Victoria’s Secret rose 2.36% on reports that the struggling retailer has attracted the attention of an activist investor.
SageTherapeutics soared 35.37% on the news that it will be acquired by Supernus Pharmaceuticals in a $795 million deal.
MGMResorts climbed 8.10% after the casino company revealed that its Bet MGM online gambling platform is expected to pull in more revenue than previously thought.
Kering, the parent company of Gucci, Yves Saint Laurent, and other luxury brands, popped 12.37% on the news that it has convinced Renault’s CEO to run the company.
What’s down
Sarepta Therapeutics plunged 42.12% after the pharma company reported a second death of a patient taking its Duchenne muscular dystrophy treatment Elevidys.
Reports that Iran wants to end hostilities pushed oil prices lower this afternoon, hurting shares of energy stocks like APACorp (down 2.43%), DevonEnergy (down 1.45%) and ConocoPhillips (down 2.02%).
here are many ways for a doctor, osteopath, podiatrist or dentist to financially invest. Traditionally, this meant picking individual stocks and bonds. Today, there are many other ways to purchase securities en mass. For example:
MUTUAL FUND: A regulated investment company that manages a portfolio of securities for its shareholders.
Open End Mutual Funds: An investment company that invests money in accordance with specific objectives on behalf of investors. Fund assets expand or contract based on investment performance, new investments and redemptions. Trade at Net Asset Value or the price the fund shares scheduled with the US Securities and Exchange Commission (SEC) trade. NAV can change on a daily basis. Therefore, per-share NAV can, as well.
Closed End Mutual Funds: Older than open end mutual funds and more complex. A CEMF is an investment company that registers shares SEC regulations and is traded in securities markets at prices determined by investments. Shares of closed-end funds can be purchased and sold anytime during stock market hours. CEMF managers don’t need to maintain a cash reserve to redeem or / repurchase shares from investors. This can reduce performance drag that may otherwise be attributable to holding cash. CEMFs may be able to offer higher returns due to the heavier use of leverage [debt]. They are subject to volatility, less liquid than open-end funds, available only through brokers and may sells at a heavily discount or premium to [NAV] determined by subtracting its liabilities from its assets. The fund’s per-share NAV is then obtained by dividing NAV by the number of shares outstanding. .
Sector Mutual Funds: Sector funds are a type of mutual fund or Exchange-Traded Fund (ETF) that invests in a specific sector or industry such as technology, healthcare, energy, finance, consumer goods, or real estate. Sector funds focus on a particular industry, allowing investors to gain targeted exposure to specific market areas. The goal is to outperform the overall market by investing in companies within a specific sector that is expected to perform well. However, they are also more susceptible to market fluctuations and specific sector risks, making them a more specialized and potentially higher-risk investment option.
EXCHANGE TRADED FUNDS: ETFs are a type of fund that owns various kinds of securities, often of one type. For example, a stock ETF holds stocks, while a bond ETF holds bonds. One share of the ETF gives buyers ownership of all the stocks or bonds in the fund. If an ETF held 100 stocks, then those who owned the fund would own a stake – albeit a very tiny one – in each of those 100 stocks.
ETFs are typically passively managed, meaning that the fund usually holds a fixed number of securities based on a specific preset index of investments. These are tax efficient. In contrast, many mutual funds are actively managed, with professional investors trying to select the investments that will rise and fall.
The Standard & Poor’s 500 Index is perhaps the world’s best-known index, and it forms the basis of many ETFs. Other popular indexes include the Dow Jones Industrial Average and the National Association of Securities Dealers Automated Quotations [NASDAQ] Composite Index.
ETFs based on these funds are called Index Funds and just buy and hold whatever is in the index and make no active trading decisions. ETFs trade on a stock exchange during the day, unlike mutual funds that trade only after the market closes. With an ETF you can place a trade whenever the market is open and know exactly the price you’re paying for the fund.
INDEX FUNDS: Index funds mirror the performance of benchmarks like the DJIA. These passive investments are an unimaginative way to invest. Passive index funds tracking market benchmarks accounted for just 21% of the U.S. equity fund market in 2012. By 2024, passive index funds had grown to about half of all U.S. fund assets. This rise of passive funds has come as they often outperform their actively managed peers. According to the widely followed S&P Indices Versus Active (SPIVA) scorecards, about 9 out of 10 actively managed funds didn’t match the returns of the S&P 500 benchmark in the past 15 years.
ASSESSMENT
Investing in individual stocks is psychologically and academically different than investing in the above funds, according to psychiatrist and colleague Ken Shubin-Stein MD, MPH, MS, CFA who is a professor of finance at the Columbia University Graduate School of Business When you buy shares of a company, you are putting all your eggs in one basket. If the company does well, your investment will go up in value. If the company does poorly, your investment will go down. Fund diversification helps reduce this risk.
CONCLUSION
Investing in the above fund types will help mitigate single company security risk.
References:
1. Fenton, Charles, F: Non-Disclosure Agreements and Physician Restrictive Covenants. In, Marcinko, DE and Hetico, HR: Risk Management, Liability Insurance, and Asset Protection Strategies for Doctors and Advisors [Best Practices from Leading Consultants and Certified Medical Planners™]. Productivity Press, New York, 2015.
Readings:
1. Marcinko, DE and Hetico, HR; Comprehensive Financial Planning Strategies for Doctors and Advisors [Best Practices from Leading Consultants and Certified Medical Planners™] Productivity Press, New York, 2017
2. Marcinko, DE: Dictionary of Health Economics and Finance. Springer Publishing Company, NY 2006
4. Shubin-Stein, Kenneth: Unifying the Psychological and Financial Planning Divide [Holistic Life Planning, Behavioral Economics, Trading Addiction and the Art of Money]. Marcinko, DE and Hetico, HR; Comprehensive Financial Planning Strategies for Doctors and Advisors [Best Practices from Leading Consultants and Certified Medical Planners™] Productivity Press, New York, 2017
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit a RFP for speaking engagements: MarcinkoAdvisors@outlook.com
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Posted on June 12, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
A Basic Overview for Emerging Physician and Medical Professional Investors
By Somnath Basu; PhD, MBA
There are three basic considerations in any investment decision.
1] The first is the understanding of the investment objective or why the investment is being made. While this may seem somewhat irrelevant at first – why would you be investing if you do not know what you are doing – combining investment objectives can pose problems down-stream.
For example, if you are saving for your retirement so that you can afford the retirement lifestyle you desire (the investment objective), your saving plan should not include any savings you are making for your children’s education (a separate investment objective). Compounding the two savings streams in one plan can very easily lead to one or both of the plans failing.
2] The second consideration is the time horizon of the investment. As a rough guide, investments that need to mature in the next 5-7 years can be considered as short term, 8-15 years as medium term and the rest as long term.
3] Finally, and probably the most important consideration of all is the importance you attach (priority) to achieving your investment objective; in other words, how safe and secure should your investments be. For example, if you are 70 years old and considering how you should invest your retirement funds so that your expenses are covered say for the next 25 years, you do not want a large margin of error in how your investments turn out; you can ill afford to be broke when you are older and hence you want your investments to be as secure as possible.
On the other hand, if the investment is for a second home or a boat, for example, you may wish to engage in some risk taking which may help in lowering your upfront investment needs. It is very important for any investor to clearly understand how much loss they can bear from any investment decision.
Decision Matrix
It is useful to express the investment framework described above as a simple decision matrix. Using the matrix (shown below) as a decision support system should clarify and simplify most investment decisions.
Understanding where in the matrix your decision falls is a very good first step of your decision. Both these elements (safety and time) will ultimately decide the kinds of financial instruments that will reside in your portfolio. We will examine the structure of each of the 9 possible combinations shown in the matrix. Before doing so, let us start by examining the various investment alternatives (e.g. stocks, bonds, etc.) since they have an implicit connection with the two dimensions portrayed in our matrix.
Stocks
Stocks are the most well known and popular form of financial investments. Stocks may be further segregated between large cap and small cap stocks, where the term “cap” is surrogate for the size of the underlying corporation or firm.
Stocks may represent investments in both domestic and international companies. Within the international category, stocks may represent corporations registered in developed (safer) or emerging (riskier) markets. In terms of our matrix dimensions, stocks are best suited when the decision is of medium or long term. In terms of safety, large cap (both domestic and international) stocks are the safest, while small cap and emerging market stocks are the most risky. The riskier the stock, the greater are the profit possibilities as are the chances of large losses.
Bonds
The second common type of investment are bonds Generally, bonds are much safer than stocks with the exception of a class of bonds known as high yield (or junk) bonds. Bonds are issued by companies, governments (domestic and international) and other agencies such as local governments (municipal bonds or “munis” which are especially desirable for those in high income tax rate categories) and quasi-government agencies such as Federal Home Loan Bank, Student Loan Administration, Agricultural Cooperative Banks, etc (collectively known as “Agency” bonds such as Ginnie/Fannie/Sallie Mae, Freddie Mac, etc.).
Government bonds are the safest, followed by agency and municipal bonds and then by bonds issues by corporations.
Corporate bonds may be safe (which are assigned credit safety ratings such as AAA, AA, BBB, etc.) or risky (junk bonds with ratings such as BB, CCC, CC etc.).
Bonds can be used for all time horizons, their maturities ranging from 3 months to 30 years. Very short term bond and bond like instruments (with maturities of one year or less) are known as money market securities which are generally safer than most other investments.
Alternate Investments
Other types of investments include real estate (long term, risky), commodities (such as energy, basic building materials, precious metals, etc.) which are also risky and which may be used for both short term and long term purposes and provide a good hedge (counter balance) in an inflationary environment, derivatives (options and futures) which are very risky and typically short term in nature. Derivatives are generally suggested for very sophisticated investors and are best left alone otherwise.
Risk Reduction
A very important feature about investments is that when various types of investments are bundled together in a portfolio, they help to reduce the risk of the investment decision without affecting the profits in a comparable way. This basic aspect of mixing various kinds of investments (stocks, bonds, etc) to reduce risk is known as diversification and it is a “must” for any investment portfolio. It is a “must” because this technique of risk reduction is generally costless (unless you are paying a financial advisor to do this for you) and it is very worthwhile. All other methods of risk reduction have cost implications.
Scenario Matrix
Armed with this nomenclature regarding various investment types we can now go about examining what the 9 combination (Scenario) portfolios may look like for investment purposes.
Starting with Scenario 1, if you wish to make a short term decision that is very important to you and needs to be very safe, investments should be made in very short term bonds (government or treasury bills)and other similar money market (short term, safe) securities. International short term bonds of developed countries may also be included. Such investment products are generally available through mutual funds or Exchange Traded Funds (or ETFs). ETFs are just like mutual funds except that they are usually cheaper, much easier to buy and sell and may provide tax deferral benefits.
If your investment falls in the Scenario 2 category, include agency/municipal bonds as well as some domestic and international (developed country) large cap stocks while for Scenario 3, smaller portions of small cap and emerging market stocks may be added proportionately while reducing some of the safer investments.
If your investment was a Scenario 4 type of investment, corporate large cap stocks (both domestic and international) could be added to agency or corporate (domestic and international) bonds. Before investing in stocks (in any Scenario) for this Scenario 4, a good question to ask is the following: how profitable were stock investments in the last 3-5 years? If the answer is “very profitable” then reduce the proportion of stocks as compared to bonds in the portfolio. If the last few years were not good, then it would be good to increase their comparable shares. The main reason for this “fine tuning” is that the fortunes of stocks (and many other types of investments) follow a cyclical pattern and the cycle is related to the general cycle of economic (GDP) growth and contraction.
It can be seen now how Scenarios 5 and 6 (as also 8 and 9) will follow a similar pattern as before, increasing proportionally in stocks (of all sizes, domestic/international), real estate, commodities, etc. Portfolios falling in these groups may also include some small cap and emerging market stocks as well as high yield or junk bonds. The proportion of these riskier investments would of course be higher for Scenario 6 over Scenario 5 (and Scenario 9 over 8).
For Scenario 7, the investment portfolio would typically resemble one that would be like an opposite of the portfolio in Scenario 1 and would include a greater proportion of large cap (domestic/international) stocks and a much smaller proportion of bonds. As we move towards Scenarios 8 and 9, the portfolios would be dominated by small cap and emerging market stocks as well as junk bonds.
Assessment
In the discussion above, I have tried to generalize the investment decision in a simplifying way. While the discussion may have centered more on stocks and bonds, it is important to note that all portfolios must “diversify” the investment risks by expanding upon the various types of investment products contained in the portfolios. The very fact that a portfolio contains various types of investments will ensure that the portfolio will perform better than those which are not as well diversified. This will be so in spite of any one of the investment types underperforming at any point in time and the diversification benefit will be received consistently over long periods of time. A popular analogy to this diversification benefit is the common phrase of not putting all eggs in one basket.
Editor’s Note: Somnath Basu PhD is program director of the California Institute of Finance in the School of Business at California Lutheran University where he’s also a professor of finance. He can be reached at (805) 493 3980 or basu@callutheran.edu
Conclusion
The above approach to investment decision-making can be considered as a basic template that can be used universally. For those seeking greater sophistication and who have a foundation built on the above model, expert advice is strongly recommended.
And so, your thoughts and comments on this ME-P are appreciated. Financial advisors please chime in on the debate? Is Basu correct; why or why not? Review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, be sure to subscribe to the ME-P. It is fast, free and secure.
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Bonds: The 10-year yield fell after CPI came in lower than analysts expected. The Treasury Department’s auction of 10-year bonds also went well, with strong participation from traders a key sign of demand for fixed income. Zero Coupon: https://medicalexecutivepost.com/2024/11/12/bonds-zero-coupon/
FIVE INVESTING MISTAKES OF DOCTORS; PLUS 1 VITAL TIP
As a former US Securities and Exchange Commission [SEC] Registered Investment Advisor [RIA] and business school professor of economics and finance, I’ve seen many mistakes that doctors must be aware of, and most importantly, avoid. So, here are the top 5 investing mistakes along with suggested guideline solutions.
Mistake 1: Failing to Diversify Investment but Beware Di-Worsification
A single investment may become a large portion of your portfolio as a result of solid returns lulling you into a false sense of security. The Magnificent Seven stocks are a current example:
Apple, up +5,064%% since 1/18/2008
Amazon, up +30,328% since 9/6/2002
Alphabet, up +1,200% since 7/20/2012
Tesla, up +21,713% since 11/16/2012
Meta, up +684% since 2/20/2015
Microsoft, up +22% since 12/21/2023
Nvidia, up +80,797% since 4/15/2005
Guideline: The Magnificent Seven [7] has grown from 9% of the S&P 500 at the end of 2013 to 31% at the end of 2024! That means even if you don’t own them, you’re still very exposed if you have an Index Fund [IF] or Exchange Traded Fund [ETF] that tracks the market. Accordingly, diversification is the only free lunch in investing which can reduce portfolio risk. But, remember the Wall Street insider aphorism that states: “Di-Versification Means Always Having to Say Your Sorry.”
The term “Di-Worsification” was coined by legendary investor Peter Lynch in his book, One Up On Wall Street to refer to over-diversifying an investment portfolio in such a way that it reduces your overall risk-return characteristics. In other words, the potential return rises with an increase in risk and invested money can render higher profits only if willing to accept a higher possibility of losses [1].
A podiatrist can easily fall into the trap of chasing securities or mutual funds showing the highest return. It is almost an article of faith that they should only purchase mutual funds sporting the best recent performance. But in fact, it may actually pay to shun mutual funds with strong recent performance. Unfortunately, many struggle to appreciate the benefits of their investment strategy because in jaunty markets, people tend to run after strong performance and purchase last year’s winners.
Similarly, in a market downturn, investors tend to move to lower-risk investment options, which can lead to missed opportunities during subsequent market recoveries. The extent of underperformance by individual investors has often been the most awful during bear markets. Academic studies have consistently shown that the returns achieved by the typical stock or bond fund investors have lagged substantially.
Guideline: Understand chasing performance does not work.Continually monitor your investments and don’t feel the need to invest in the hottest fund or asset category. In fact, it is much better to increase investments in poor performing categories (i.e. buy low). Also keep in remind rebalancing of assets each year is key. If stocks perform poorly and bonds do exceptionally well, then rebalance at the end of the year. In following this strategy, this will force a doctor into buying low and selling high each year.
Often doctors make their investment decisions under the belief that stocks will consistently give them solid double-digit returns. But the stock markets go through extended long-term cycles.
In examining stock market history, there have been 6 secular bull markets (market goes up for an extended period) and 5 secular bear markets (market goes down) since 1900. There have been five distinct secular bull markets in the past 100+ years. Each bull market lasted for an extended period and rewarded investors.
For example, if an investor had started investing in stocks either at the top of the markets in 1966 or 2000, future stock market returns would have been exceptionally below average for the proceeding decade. On the other hand, those investors fortunate enough to start building wealth in 1982 would have enjoyed a near two-decade period of well above average stock market returns. They key element to remember is that future historical returns in stocks are not guaranteed. If stock market returns are poor, one must consider that he or she will have to accept lower projected returns and ultimately save more money to make up for the shortfall. For example,
The May 6th, 2010, flash crash, also known as the crash of 2:45, was a United States trillion-dollar stock market plunge which started at 2:32 pm EST and lasted for approximately 36 minutes.
And, investors who have embraced the “buy the dip” strategy in 2025 have been handsomely rewarded, with the S&P 500 delivering its strongest post-pull back returns in over three decades.
According to research from Bespoke Investment Group, the S&P 500 has gained an average of 0.36% in the trading session following a down day so far in 2025. The only year with a comparable performance was 2020, which saw a 0.32% average post-dip gain [2].
The most recent example came on May 27, 2025 when the S&P 500 surged more than 2% after falling 0.7% in the final session before the holiday weekend. The rally was sparked by President Trump’s decision to scale back huge previously threatened tariffs on EU —a recurring catalyst behind many of 2025’s rebound.
Guideline: Beware of projecting forward historical returns. Doctors should realize that the stock markets are inherently volatile and that, while it is easy to rely on past historical averages, there are long periods of time where returns and risk deviate meaningfully from historical averages.
Some doctors believe they are “smarter than the market” and can time when to jump in and buy stocks or sell everything and go to cash. Wouldn’t it be nice to have the clairvoyance to be out of stocks on the market’s worst days and in on the best days?
Using the S&P 500 Index, our agile imaginary doctor-investor managed to steer clear of the worst market day each year from January 1st, 1992 to March 31st, 2012. The outcome: s/he compiled a 12.42% annualized return (including reinvestment of dividends and capital gains) during the 20+ years, sufficient to compound a $10,000 investment into $107,100.
But what about another unfortunate doctor-investor that had the mistiming to be out of the market on the best day of each year. This ill-fated investor’s portfolio returned only 4.31% annualized from January 1992 – March 2012, increasing the $10,000 portfolio value to just $23,500 during the 20 years. The design of timing markets may sound easy, but for most all investors it is a losing strategy.
More contemporaneously on December 18th 2024, the DJIA plummeted 2.5%, while the S&P 500 declined 3% and the NASDAQ tumbled 3.5%
Guideline: If it looks too good to be true, it probably is. While jumping into the market at its low and selling right at the high is appealing in theory, we should recognize the difficulties and potential opportunity and trading costs associated with trying to time the stock market in practice. In general, colleagues are be best served by matching their investment with their time horizon and looking past the peaks / valleys along the way.
Mistake 5: Failing to Recognize the Impact of Fees and Expenses
A free dinner seminar or a polished stock-broker sales pitch may hide the total underlying costs of an investment. So, fees absolutely matter.
The first costing step is determining what the fees actually are. In a mutual fund, these costs are found in the company’s obligatory “Fund Facts”. This manuscript clearly outlines all the fees paid–including up front fees (commissions and loads), deferred sales charges and any switching fees. Fund management expense ratios are also part of the overall cost. Trading costs within the fund can also impact performance.
Here is a list of the traditional mutual fund fees:
Front End Load: The commission charged to purchase a fund through a stock broker or financial advisor. The commission reduces the amount you have available to invest. Thus, if you start with $100,000 to invest, and the advisor charges up to an 8 percent front end load, you end up actually investing $92,000.
Deferred Sales Charge (DSC) or Back End Load: Imposed if you sell your position in the mutual fund within a pre-specified period of time (normally one – five years). It is initiated at a higher start percentage (i.e. as high as 10 percent) and declines over a specific period of time.
Operating Fees: Costs of the mutual fund including the management fee rewarded to the manager for investment services. It also includes legal, custodial, auditing and marketing fees.
Annual Administration Fee: Many mutual fund companies also charge a fee just for administering the account – usually under $100-150 per year.
Guideline: Know and understand all fees.
For example: A 1 percent disparity in fees may not seem like much but it makes a considerable impact over a long time period.
Consider a $100,000 portfolio that earns 8 percent before fees, grows to $320,714 after 20 years if the investor pays a 2 percent operating fee. In comparison, if s/he opted for a fund that charged a more reasonable 1 percent fee, after 20 years, the portfolio grows to be $386,968 – a divergence of over $66,000!
This is the value of passive or index investing. In the case of an index fund, fees are generally under 0.5 percent, thus offering even more savings over a long period of time.
One Vital Tip: Investing Time is on Your Side
Despite thousands of TV shows, podcasts, textbooks, opinions and university studies on investing, it really only has three simple components. Amount invested, rate of return and time. By far, the most important item is time! For example:
Nvidia: if you invested $1,000 in 2009, you’d have $338,103 today.
Apple: if you invested $1,000 in 2008, you’d have $48,005 today.
Netflix: if you invested $1,000 in 2004, you’d have $495,679 today.
Unfortunately, this list of investing mistakes is still being made by many doctors. Fortunately, by recognizing and acting to mitigate them, your results may be more financially fruitful and mentally quieting.
REFERENCES:
1. Lynch, Peter: One Up on Wall Street [How to Use What You Already Know to Make Money in the Market]: Simon and Shuster (2nd edition) New York, 2000.
1. Marcinko, DE; Comprehensive Financial Planning Strategies for Doctors and Advisors [Best Practices from Leading Consultants and Certified Medical Planners™] Productivity Press, New York, 2017.
2. Marcinko, DE: Dictionary of Health Economics and Finance. Springer Publishing Company, New York, 2006.
3. Marcinko, DE; Risk Management, Liability Insurance, and Asset Protection Strategies for Doctors and Advisors [Best Practices from Leading Consultants and Certified Medical Planners™] CRC Press, New York, 2015.
BIO: As a former university Professor and Endowed Department Chair in Austrian Economics, Finance and Entrepreneurship, the author was a NYSE Registered Investment Advisor and Certified Financial Planner for a decade. Later, he was a private equity and wealth manager
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
Posted on June 11, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
Tesla climbed another 5.67% on signs that Elon Musk and President Trump are mending fences and on hype around the robotaxi reveal this week.
TSMC rose 2.63% after the semiconductor company reported that its revenue in the month of May rose 39.6% year over year.
Disney rose 2.65% higher a day after agreeing to purchase Comcast’s stake in streaming service Hulu for $438.7 million. Comcast climbed 2.95%.
Solar stocks got a bit of hope after the Wall Street Journal reported that tech companies are lobbying Congress to keep clean energy subsidies in the tax and spending bill. SolarEdge rose 11.81%, and Sunrun gained 7.13%.
Insmed exploded 28.65% thanks to strong results for the biopharma company’s new treatment for pulmonary arterial hypertension.
Casey’s General Store rose 11.59% after the retailer crushed Wall Street’s profit expectations last quarter and raised its dividend.
McDonald’s lost 1.43% thanks to a double downgrade from Redburn Atlantic analysts, who think the fast food titan’s slowing foot traffic and headwinds from obesity drugs will hurt its growth. That’s the company’s third downgrade in three days.
Stocks: Markets meandered higher as investors awaited news from ongoing US & China trade negotiations in London. Commerce Secretary Howard Lutnick said talks were going well and could continue into tomorrow.
Commodities: Oil soared to its highest price since April on hopes that a trade deal between the world’s largest economies could spur demand, but plunged back to earth after the US said oil output will fall next year.
Crypto: After just barely holding on last week, Bitcoin has now stayed above $100,000 for 30 days straight for the first time ever—a signal to traders that there’s a new level of support for the crypto king.
Posted on June 10, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By AI
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Stocks: Equities inched higher on a handful of optimistic headlines. First, the US and China trade teams met in London today with hopes the two superpowers could resolve disputes over export curbs. Also, a new survey from the New York Fed found that consumer expectations for inflation eased across all time horizons in May. STOCKS: https://medicalexecutivepost.com/2025/04/18/stocks-basic-definitions/
Many doctors are surprised to learn of an alternative investment known as a hedge fund, pooled investment vehicle or private investment fund. Unlike mutual funds, they can be structured in many ways. However, these funds cannot be marketed or advertised, but they are far from illegal or illicit.
In fact, physicians were among the early investors in one the most successful hedge funds. Warren Buffett got his start in 1957 running the Buffett Partnership, a hedge fund not open to the public. His first appearance as a money manager was before a group of physicians in Omaha, Nebraska. Eleven decided to invest some money with him. A few then followed into Berkshire Hathaway Inc, now among the most highly valued companies in the world.
And, more recently, Scion Asset Management® LLC, is a private investment firm founded and led by my eloquent colleague Michael J. Burry, MD and featured in the movie, The Big Short. Other hedge fund mangers of note include: George Soros, Carl Icahn, Ken Griffin, David Tepper, John Paulson and Bill Ackman.
A hedge fund is a limited partnership of private investors whose money is managed by professional fund managers who use a wide range of strategies; including leveraging [debt] or trading of non-traditional assets [real-estate, collectible, commodities, cyrpto-currency, etc] to earn above-average returns. Hedge funds are considered a risky alternative investment and usually require a high minimum investment or net worth. This person is known as an “accredited investor” or “Regulation D” investor by the US Securities Exchange Commission and must have the following attributes:
A net worth, combined with spouse, of over $1 million, not including primary residence
An income of over $200,000 individually, or $300,000 with a spouse, in each of the past two years
The hurdle rate is part of the fund manager’s performance incentive compensation. Also known as a “benchmark,” it is the amount, expressed in percentage points an investor’s capital must appreciate before it becomes subject to a performance incentive fee. Podiatrists should view the hurdle rate as a form of protection or the fee arrangement.
The hurdle rate benchmarks a single year’s performance and may be considered mutually exclusive of any other year, or the hurdle rate may compound each year. The former case is more common. In the latter case, a portfolio manager failing to attain a hurdle rate in the first year will find the effective hurdle rate considerably higher during the second year.
Once a fund manager attains the hurdle rate, the investor’s capital account may be charged a performance incentive fee only on the performance above and beyond the hurdle rate. Alternatively, the account may be charged a performance fee for the entire level of performance, including the performance required to attain the hurdle rate. Other variations on the use of the hurdle rate exist, and are limited only by the contract signed between the fund manager and the investor. The hurdle rate is not generally a negotiating point, however.
Example: A fund charges a performance fee with a 6 percent hurdle rate, calculated in mutually exclusive manner. A podiatrist places $100,000 with the fund. The first year’s performance is 5 percent. The doctor therefore owes no performance fee during the first year because the portfolio manager did not attain the hurdle rate. During year two, the portfolio manager guides the fund to a 7 percent return. Because the hurdle rate is mutually exclusive of any other year, the portfolio manager has attained the 6 percent hurdle rate and is entitled to a performance fee.
High Water Mark
Some hedge funds feature a “high water mark” provision known as a ”loss-carry forward.” As with the hurdle rate, the high water mark is a form of protection. It is an amount equal to the greatest value of an investor’s capital account, adjusted for contributions and withdrawals. The high water mark ensures that the manager charges a performance incentive fee only on the amount of appreciation over and above the high water mark set at the time the performance fee was last charged. The current trend is for newer funds to feature this high water mark, while older, larger funds may not feature it.
Example: A fund charges a 20 percent performance fee with a high water mark but no hurdle rate. A podiatrist contributes $100,000 to the fund. During the first year, the hedge fund manager grows that capital account to $110,000 and charges a 20 percent performance fee, or $2,000. The ending capital account balance and high water mark is therefore $108,000. During year two, the account falls back to $100,000, but the high water mark remains $108,000. During year three, in order for the manager to charge a performance fee, the manager must grow the capital account to a level above $108,000.
Claw Back Provision
Rarely, a hedge fund may provide investors with a “claw back” provision. This term results in a refund to the investor of all or part of a previously charged performance fee if a certain level of performance is not attained in subsequent years. Such refunds in the face of poor or inadequate performance may not be legal in some states or under certain authorities.
ASSESSMENT
Managers of hedge funds, like colleague Dimitri Sogoloff MBA who is the CEO of Horton Point investment-technology firm, often aim to produce returns that are relatively uncorrelated with market indices and are consistent with investors’ desired level of risk.
While hedging may reduce some risks overall, they cannot all be eliminated. According to a report by the Hennessee Group, hedge funds were approximately one-third less volatile between 1993 and 2010.
For a podiatrist who already holds mutual funds and/or individual stocks and bonds, a hedge fund may provide diversification and reduce overall portfolio risk. Consider investing in them with care.
2. Burry, Michael, J: Hedge Funds [Wall Street Personified]. In, Marcinko, DE and Hetico, HR: Comprehensive Financial Planning Strategies for Doctors and Advisors [Best Practices from Leading Consultants and Certified Medical Planners™] Productivity Press, New York, 2017.
3. Marcinko, DE and Hetico, HR: Risk Management, Liability Insurance, and Asset Protection Strategies for Doctors and Advisors [Best Practices from Leading Consultants and Certified Medical Planners™]. Productivity Press, New York, 2015.
4. Marcinko, DE: Dictionary of Health Economics and Finance. Springer Publishing Company, NY 2006
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit a RFP for speaking engagements: MarcinkoAdvisors@outlook.com
Stocks: The S&P 500 touched 6,000 points for the first time since February and wrapped up its fifth positive week in the past seven following a better-than-expected jobs report. The vibes got even better in the afternoon following a President Trump announcement that the US and China trade teams will meet in London on Monday. STOCKS: https://medicalexecutivepost.com/2025/04/18/stocks-basic-definitions/
Bonds: Treasury yields ticked up in response to the solid May jobs report, a sign that investors were reducing bets on the scale of rate cuts this year. That’s not what Trump wants to hear: He urged Fed Chair Jerome Powell to slash interest rates by a jumbo-sized full point to pour “rocket fuel” on the economy. REVENUE BONDS: https://medicalexecutivepost.com/2024/12/20/bonds-revenue/
Oil: Oil prices have gone sideways for three straight weeks now, trading within a $4 range around $65/barrel since the middle of May. We’ll let you know when something interesting happens. CRUDE OIL:https://medicalexecutivepost.com/2024/08/14/wti-crude-oil/
Posted on June 5, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
HealthEquity jumped 8.96% after the health savings account custodian boosted its fiscal guidance for the year ahead.
What’s down
Tesla tumbled 3.55% on weak sales data from China and Germany.
Apple fell 0.22% thanks to a downgrade from Needham analysts, who think the company’s valuation is way too high.
Wells Fargo lost 0.36% after the Federal Reserve lifted its 2018 cap on the bank’s assets.
What goes up must come down: ConstellationEnergy sank 4.31% after Citigroup downgraded the nuclear power provider, warning it’s not getting its money’s worth with Meta Platforms.
Asana plunged 20.47% after the work management software maker announced fiscal forecasts that came in below Wall Street’s expectations.
Flowserve lost 6.27% and ChartIndustries dropped 9.46% after the two industrial manufacturers agreed to an all-stock merger of equals.
According to wikipedia, the S&P 500 Dividend Aristocrats is a stock market index composed of the companies in the S&P 500 index that have increased their dividends in each of the past 25 consecutive years. It was launched in May 2005.
There are other indexes of dividend aristocrats that vary with respect to market cap and minimum duration of consecutive yearly dividend increases. Components are added when they reach the 25-year threshold and are removed when they fail to increase their dividend during a calendar year or are removed from the S&P 500. However, a study found that the stock performance of companies improves after they are removed from the index The index has been recommended as an alternative to bonds for investors looking to generate income.
To invest in the index, there are several exchange traded funds (ETFs), which seek to replicate the performance of the index.
Posted on May 31, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
The median homeprice jumped 1.6% YoY last month and is sitting at $431,931. Meanwhile, mortgage rates for a 30-year fixed loan (the most common) are still hovering just under 7%. The chief economist of the National Association of Realtors said lower mortgage rates are the key to getting buyers to buy homes again.
UltaBeauty is sitting pretty, up 11.78% after the cosmetics retailer crushed earnings expectations and raised its fiscal guidance for the year ahead.
CostcoWholesale rose 3.12% after beating Wall Street’s earnings expectations, though same-store sales did slip a bit.
Zscaler climbed 9.79% on strong earnings for the cybersecurity company, including 23% revenue growth.
Palantir popped 7.73% on a report from the New York Times that the Trump administration has asked the company to help the government compile data on US citizens.
What’s down
Nvidia slipped 2.92% as rhetoric between the US and China over semiconductor import restrictions reignited investor fears.
Gap plunged 20.18% after the retailer revealed that tariffs will cost between $100 and $150 million.
RegeneronPharmaceuticals tumbled 19.01% thanks to mixed results for its new respiratory drug in late stage trials. The medication is made in partnership with Sanofi, which also dropped 5.61%.
DellTechnologies sank 2.08% after missing earnings expectations last quarter, though it did manage to beat on revenue.
PagerDuty, which is in fact a cloud computing company and not a seller of 1990s tech, lost 11.43% after issuing lower second-quarter guidance than Wall Street forecast.
Posted on May 27, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
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Stock markets are coming off their worst week since April as President Trump’s tariff threats on Europe and Apple revived trade war jitters. The president has since delayed tariff threats on the EU, giving European stocks a boost yesterday, while Wall Street had the day off for Memorial Day.
No such relief appears to be coming for Apple, which has fallen 8% so far this month, and is the only Magnificent Seven member in the red for May, per FactSet.
Most individual physician portfolios are simply a list of stocks. Doctors with such lists usually know the cost of each position and when they acquired it. It is not unusual to find inherited low cost stocks in the account that have been held for many years.
When you inherit securities, a new cost basis is established (the price of the stock on the date of death or six months later—the executor of the estate makes this determination). Even though there would be no capital gain liability if the stock were sold immediately after date of death, most people simply don’t do anything, just hold the stock. Of course taxes should be considered when selling securities but the investment merit should be the overriding factor.
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Doctor and Accountant Opinions
In a personal communication, Mr. L. Eddie Dutton, CPA said, “First make an investment decision and if it fits into the tax plan, so much the better. Doctors often wonder where they will get the money to pay the taxes. I say to get it from the sale of the appreciated stock and cry all the way to the bank with your profit.”
Dr. Ernest Duty MD, a very successful private investor advises “Ask yourself this question: If you had the money instead of the stock, would you buy the stock? If your answer is ‘Yes’ then, hold on to the stock but if you say ‘No, I wouldn’t buy that stock today’ then, sell it” [personal communication].
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit a RFP for speaking engagements: E-MAILCONTACT: MarcinkoAdvisors@outlook.com
A hedge fund is a limited partnership of private investors whose money is pooled and managed by professional fund managers. These managers use a wide range of strategies, including leverage (borrowed money) and the trading of nontraditional assets, to earn above-average investment returns. A hedge fund investment is often considered a risky, alternative investment choice and usually requires a high minimum investment or net worth. Hedge funds typically target wealthy investors.
I want to invest with a manager that has the skills to “hedge” a portfolio, but I do not wish to mix my money with other investors as in a hedge fund.
QUESTION:Can I hire hedge fund managers to manage my account separately?
Some hedge fund managers do take the time to recruit and manage separate accounts, with or without the help of referring brokers.
However, before long the administrative burden of managing so many separate accounts can become quite significant. Hence, the minimums for such separate accounts are generally much higher than if one were to invest in the manager’s hedge fund.
The best feature of these separate accounts is that potentially every aspect of the investment account, including fees, is negotiable. Other features include greater transparency and increased liquidity, since separately managed accounts can often be shut down on short notice.
Investors must be aware, however, that for practical purposes the portfolio manager generally will buy and sell the same securities in the separately managed accounts that the portfolio manager buys and sells in the hedge fund, yet the expenses incurred by the investor will likely be higher.
Posted on May 19, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
BREAKING NEWS [12:09 am, EST]
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Stock Futures are contracts to buy or sell a specific underlying asset at a future date. The underlying asset can be a commodity, a security, or other financial instrument. Futures trading requires the buyer to purchase or the seller to sell the underlying asset at the set price, whatever the market price, at the expiration date.
Stock futures pointed lower on Monday morning as investors weighed fresh warnings on U.S. debt and the potential for President Donald Trump’s trade war to heat up again.
Dow Futures: 42,406.00
Fair Value: 42,752.14
Change: – 330.000.77%
Implied Open: – 346.14
Late Friday night, Moody’s downgraded the U.S. credit rating one notch. This came as Congress tries to extend Trump’s tax cuts and add new ones, which are expected to deepen federal deficits.
The phrase “sell in May and go away” suggests that investors should sell their stocks in May and avoid the market during the summer months, as historical data indicates poorer stock performance during this period.
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It’s Friday morning, so you’re probably clocking out once you’re done reading this ME-P. And who could blame you, after such a wild month of watching your portfolio zig & zag with every headline.
In fact, why not just sell all your stocks and walk away entirely? You’ve got to admit, it’s tempting. After all, markets have completed an incredible round trip since Liberation Day—you could just call it even, start celebrating Cinco de Mayo a bit late, and maybe check your portfolio again sometime around August.
“Sell in May and go away” might sound like appealing advice these days, especially considering that the market usually spends the next six months under-performing: The S&P 500 gains just 1.8% on average from May through October, the worst-performing stretch of the year historically.
These ‘worst six months’ have gained in eight of the last 10 years,” he recently wrote. He continued: “Not to mention the month of May has been higher nine of the past 10 years, so maybe we should call it,
Posted on May 9, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
Former Theranos CEO Elizabeth Holmes on Thursday lost her bid to have an appeal of her 2022 fraud conviction reheard. The 9th Circuit U.S. Court of Appeals denied Holmes’ request for a rehearing before the original three-judge panel that upheld her conviction. At the same time, the court said no judge on the circuit court had asked for a vote on whether to have the full court rehear the appeal.
IonQ is one of the rare cases of a company in the quantum computing industry that reported solid financials. Shareholders rewarded it with a 9.27% gain today.
Axon Enterprise got a 14.13% jolt after the Taser maker reported strong earnings growth and upped its revenue guidance for the current quarter.
Crypto stocks had a great day thanks to bitcoin’s breakout (more on that later). MicroStrategy rose 5.58%, Coinbase climbed 5.06%, and Riot Platforms gained 7.65%.
What’s down
Arm Holdings fell 6.18% after the semiconductor manufacturer warned that both earnings and revenue will come in lower than Wall Street expected this year.
Peloton Interactive lost 6.73% thanks to a bigger-than-expected loss last quarter and a 13% decline in revenue.
Cleveland-Cliffs tumbled off a cliff on the news that the steelmaker is fully or partially pausing production at six of its facilities. Shares tumbled 15.78%.
Krispy Kreme crashed 24.71% after the donut chain paused its deal with McDonald’s, scrapped its dividend to save money, and pulled its fiscal guidance.
Fortinet dropped 8.41% after the cybersecurity company beat analyst forecasts but projected lower revenue in the current quarter than initially expected.
Pharma stocks fell across the board on reports that President Trump will slash drug costs with revisions to Medicare pricing. Eli Lilly lost 3.25%, Bristol Myers sank 1.55%, and AbbVie fell 1.33%.
Posted on May 5, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
U.S. stock futures declined after the S&P 500 notched its longest winning streak in more than 20 years last week. Dow Jones Industrial Average futures were down around 280 points, or 0.7%, as of 11 p.m. Eastern. S&P 500 futures and NASDAQ-100 futures were off about 0.8%.
The labor market stayed strong. The US added 177,000 jobs in April, while unemployment stayed steady at 4.2%, new Labor Department data shows. That was slightly less job growth than the month before, but still more than expected, and it shows a resilient labor environment even as the president’s introduction of tariffs roiled the stock and bond markets and raised concerns about a recession. President Trump celebrated the news in a Truth Social post that once again urged the Fed to cut interest rates.
Markets: Stocks soared like a balloon whose string a toddler couldn’t keep hold of yesterday. Unexpectedly strong jobs data for last month and reports that China is open to trade talks helped push the S&P 500 to its longest winning streak in more than 20 years (more on that later), erasing the losses from recent tariff turmoil. On its own impressive streak is Netflix, which hit an all-time high and finished its 11th day in the green for its longest positive run ever.
Crude oil futures dropped more than 3% Sunday after OPEC+ agreed to accelerate production increases for a second straight month in June by 411K bbl/day.
U.S. WTI crude (CL1:COM) for June delivery recently traded -3.4% at $56.28/bbl and July Brent crude (CO1:COM) -3.2% at $59.34/bbl, with both front-month contracts touching their lowest levels since April 9th.
Visualize: How private equity tangled banks in a web of debt, from the Financial Times.
Posted on April 30, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
FUNDAMENTAL INDUSTRY CHANGES
By Staff Reporters
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Index Funds
An index mutual fund or ETF (exchange-traded fund) tracks the performance of a specific market benchmark—or “index,” like the popular S&P 500 Index—as closely as possible. That’s why you may hear people refer to indexing as a “passive” investment strategy.
Instead of hand-selecting which stocks or bonds the fund will hold, the fund’s manager buys all (or a representative sample) of the stocks or bonds in the index it tracks.
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Quantum Computing
Unlike traditional computers that use bits, quantum computers utilize qubits. These qubits are capable of being in a state of superposition, where they can represent both 0 and 1 simultaneously, enabling the processing of multiple calculations at once. This could allow quantum computers to outperform classical computers in solving certain complex problems. However, the field is still overcoming challenges such as qubit stability and decoherence; especially in these three areas:
Quantum computing could fundamentally alter healthcare by accelerating drug discovery and improving individualized medicine. Rapid analysis of enormous volumes of biological data allows quantum computers to find trends that might guide the creation of more potent treatments. In addition to accelerating drug development, this will enable customized treatments tailored to unique genetic profiles.
Faster and more accurate financial models produced by quantum computing will transform the banking sector. Through real-time analysis of intricate financial systems, it can help investors to control risk and make better decisions. More precise market forecasts will help maximize portfolio management and trading strategies.
Through greatly enhanced medical diagnosis and patient care, quantum computing can transform the healthcare industry. Quantum computers can remarkably accurately find trends and possible health hazards by analyzing enormous volumes of medical data in a fraction of the time. Early diagnosis and more customized treatment alternatives follow from this.
B–QTUM Index Fund
Index Description: The BlueStar® Machine Learning and Quantum Computing Index (BQTUM) tracks liquid companies in the global quantum computing and machine learning industries, including products and services related to quantum computing or machine learning, such as the development or use of quantum computers or computing chips, superconducting materials, applications built on quantum computers, embedded artificial intelligence chips, or software specializing in the perception, collection, visualization, or management of big data.
The Zweig Breadth Thrust may sound like an extremely difficult yoga position, but it’s actually a bullish technical indicator with an extraordinary record of 100% accuracy that was just triggered.
Created by investment advisor and author Martin Zweig, the indicator takes the 10-day moving average of the number of advancing stocks across the market and divides it by the number of advancing stocks plus the number of declining stocks. When the resulting percentage rises from below 40% to above 61.5% in 10 trading days, it’s a sign that stocks are rapidly going from oversold to overbought.
The math is a bit complicated, but Carson Research’s Chief Market Strategist Ryan Detrick certainly thinks highly of it.
According to the chart that he just posted on X, the Zweig Breadth Thrust has a perfect record of predicting market gains 6 and 12 months after it appears.
With the indicator triggering on Friday, here’s hoping that we can continue to trust the Zweig Thrust.
Posted on April 20, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
Markets: The markets were closed for Good Friday giving investors time to take a breather amid tariff-induced volatility after all three major indexes finished the short trading week in the red.
Stock spotlight: As a sign of just how confusing it is out there, United Airlines stock rose this week after the company released two different forecasts—one for a stable economy and one for a possible US recession.
A $35 billion merger between Capital One and Discover that would make Capital One the nation’s largest credit card issuer cleared a major regulatory hurdle this week, according to multipleoutlets, as the Justice Department told antitrust officials it did not find reasons to block the deal, paving the way for a potentially historic shakeup of the American credit card space.
When you buy a share of stock, you are taking ownership in a company. Collectively, the company is owned by all the shareholders, and each share represents a claim on assets and earnings. If the company distributes profits to its shareholders, you should receive a proportionate share of the earnings.
Stocks are often categorized by the size of the company, or their market capitalization. The market capitalization is determined by multiplying the number of outstanding shares by the current share price. The most common market cap classes are small-cap (valued from $100 million to $1 billion), mid-cap ($1 billion to $10 billion), and large cap ($10 billion to $100 billion).
Stocks are also categorized by their sector, or the type of business the company conducts. Common sectors include utilities, consumer staples, energy, communications, financial, health care, transportation, and technology.
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Stocks are often viewed as being in one of two categories — growth or value.
Growth stocks are ones that are associated with high quality, successful companies that are expected to continue growing at a better-than-average rate as compared to the rest of the market.
Value stocks are ones that have generally solid fundamentals, but are currently out of favor with the market. This may be due to the company being relatively new and unproven in the market, or because the company has recently experienced a decline due to the company’s sector being affected negatively. An example of this would be if the federal government was to levy a new tax on all cell phones, thus negatively affecting all cell phone company stocks.
History has shown that, over time, stocks have provided a better return than bonds, real estate, and other savings vehicles. As a result, stocks may be the ideal investment for investors with long-term goals.
Posted on April 18, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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U.S. stock and bond markets will be closed on Good Friday. Many global markets will also be closed Friday. Exceptions include Japan and mainland China, which will be open as usual. U.S. markets will reopen Monday. Many international markets will remain shut to mark Easter Monday, including Australia, Hong Kong, and exchanges in France, Germany and the U.K.
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YESTERDAY 4/17/25
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🟢 What’s up
TSMC eked out a 0.10% gain after the semiconductor maker reported a 60% increase in profits last quarter and downplayed the effects of tariffs.
Charles Schwab isn’t just the guy who made $2 billion from market chaos last week. It’s also the brokerage that reported record quarterly revenue, but shares only rose 0.65%.
Hertz climbed another 43.87%, tacking on another day of big wins after Bill Ackman’s Pershing Square Capital took a stake in the rental car company.
Trump Media & Technology Group popped 11.65% after the company asked the SEC to investigate a hedge fund with a $105 million short bet against it.
Chinese tea chain Chagee soared 15.86% in its first day of trading on the Nasdaq.
DR Horton missed analyst expectations last quarter and lowered its fiscal year guidance, but investors quickly forgave the country’s largest homebuilder and pushed shares up 3.16%.
What’s down
Alphabet took a 1.38% hit after a federal judge ruled that Google is a monopoly. This marks Alphabet’s second antitrust loss since last August.
Alcoa fell 6.98% after the aluminum mining behemoth announced it ate about $20 million in tariff-related costs last quarter, noting that this figure could rise to $90 million in the current quarter.
Posted on April 15, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Stocks kept the good vibes going for a second trading day yesterday with tech companies like Apple rising as investors reacted to the weekend’s news that smartphones and computers would be temporarily exempt from “reciprocal” tariffs—at least until new semiconductor tariffs are imposed.
Car companies also jumped after President Trump suggested he wanted to “help” as automakers try to transition their production to the US in the face of 25% auto tariffs.
Posted on April 14, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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US Markets
After one of the most volatile weeks in Wall Street history, the S&P 500 closed 5.7% higher for its best week since 2023. But investors are taking little comfort with the rebound in stocks.
A declining dollar fell to a three-year low against the euro on Friday and spiking bond yields have some observers warning of a monumental, structural shift away from the US as a safe haven due to the recent tariff turmoil.
Posted on April 13, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Convertible Arbitrage
Convertible arbitrage is the oldest market-neutral strategy. Designed to capitalize on the relative mispricing between a convertible security (e.g. convertible bond or preferred stock) and the underlying equity, convertible arbitrage was employed as early as the 1950s.
Since then, convertible arbitrage has evolved into a sophisticated, model-intensive strategy, designed to capture the difference between the income earned by a convertible security (which is held long) and the dividend of the underlying stock (which is sold short). The resulting net positive income of the hedged position is independent of any market fluctuations. The trick is to assemble a portfolio wherein the long and short positions, responding to equity fluctuations, interest rate shifts, credit spreads and other market events offset each other.
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Hedge Fund Research (HFR) New York, offers the following description of the strategy
Convertible Arbitrage involves taking long positions in convertible securities and hedging those positions by selling short the underlying common stock. A manager will, in an effort to capitalize on relative pricing inefficiencies, purchase long positions in convertible securities, generally convertible bonds, convertible preferred stock or warrants, and hedge a portion of the equity risk by selling short the underlying common stock. Timing may be linked to a specific event relative to the underlying company, or a belief that a relative mispricing exists between the corresponding securities. Convertible securities and warrants are priced as a function of the price of the underlying stock, expected future volatility of returns, risk free interest rates, call provisions, supply and demand for specific issues and, in the case of convertible bonds, the issue-specific corporate/Treasury yield spread. Thus, there is ample room for relative mis-valuations.
Because a large part of this strategy’s gain is generated by cash flow, it is a relatively low-risk strategy.
An alternative investment is a financial asset that does not fall into one of the conventional investment categories. Conventional categories include stocks, bonds, and cash. Alternative investments can include private equity or venture capital, hedge funds, managed futures, art and antiques, commodities, and derivatives contracts. Real estate is also often classified as an alternative investment.
QUESTION: But what about a medical, podiatric or dental practice?
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AnAlternate Asset Class Surrogate?
A medical practice is much like an alternative investment [AI], or alternate asset class in, two respects.
First, it provides the work environment that generates personal income which has been considered generous, to date.
Second, it has inherent appreciation and sales value that can be part of an exit (retirement) or succession planning transfer strategy.
Conclusion
So, unlike the emerging thought that offers Social Security payments as a surrogate for an asset classes; or a federally insured AAA bond – a medical practice might also be considered by some folks as an asset class within a well diversified modern investment portfolio.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit a RFP for speaking engagements: MarcinkoAdvisors@outlook.com
Financial Modeling is one of the most highly valued, but thinly understood, skills in financial analysis. The objective of financial modeling is to combine accounting, finance, and business metrics to create a forecast of a company’s future results.
According to Jeff Schmidt, a financial model is simply a spreadsheet, usually built in Microsoft Excel, that forecasts a business’s financial performance into the future. The forecast is typically based on the company’s historical performance and assumptions about the future and requires preparing an income statement, balance sheet, cash flow statement, and supporting schedules (known as a three-statement model, one of many types of approaches to financial statement modeling). From there, more advanced types of models can be built such as discounted cash flow analysis (DCF model), leveraged buyout (LBO), mergers and acquisitions (M&A), and sensitivity analysis
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DEFINED TERMS
Discounted Cash Flow (DCF): A valuation method used to estimate the value of an investment based on its expected future cash flows, adjusted for the time value of money. It’s like deciding whether a treasure chest is worth diving for now, based on the gold coins you’ll be able to cash in later.
Sensitivity Analysis: This involves changing one variable at a time to see how it affects an outcome. Imagine tweaking your coffee-to-water ratio each morning to achieve the perfect brew strength.
Budget – A budget is the amount of money a department, function, or business can spend in a given period of time. Usually, but not always, finance does this annually for the upcoming year.
Rolling Forecast – A rolling forecast maintains a consistent view over a period of time (often 12 months). When one period closes, finance adds one more period to the forecast.
Topside – A topside adjustment is an overlay to a forecast. This is typically completed by the corporate or headquarter team. As individual teams submit a forecast, the consolidated result might not make sense or align with expectations. When this occurs, the high-level teams use a topside adjustment to streamline or adjust the consolidated view.
Monte Carlo Simulation: Picture yourself at the casino, but instead of gambling your savings away, you’re using this technique to predict different outcomes of your business decisions based on random variables. It’s like playing financial roulette with the odds in your favor.
What-If Analysis: Ever daydream about what would happen if you took that leap of faith with your business? This tool allows you to explore various scenarios without risking a dime. It’s like trying on outfits in a virtual dressing room before making a purchase.
Leveraged Buyout (LBO) Model: This is a bit like orchestrating a heist, but legally. It’s about acquiring a company using borrowed money, with plans to pay off the debts with the company’s own cash flows. High stakes, high rewards.
Mergers and Acquisitions (M&A) Model: Picture two puzzle pieces coming together. This model evaluates how combining companies can create a new, more valuable entity. It’s the corporate version of a matchmaker.
Three Statement Model: The holy trinity of financial modeling, linking the income statement, balance sheet, and cash flow statement. It’s like weaving a tapestry where each thread is crucial to the overall picture.
Capital Asset Pricing Model (CAPM): A formula that calculates the expected return on an investment, considering its risk compared to the market. It’s like choosing the best roller coaster in the park, balancing thrill and safety.
Cash Flow Forecasting: This is your financial weather forecast, predicting the cash flow climate of your business. It helps you plan for sunny days and save for the rainy ones.
Cost of Capital: The price of financing your business, whether through debt or equity. It’s like the interest rate on your growth engine, pushing you to maximize every dollar invested.
Debt Schedule: A timeline of your business’s debts, showing when and how much you owe. It’s your roadmap to becoming debt-free, one milestone at a time.
Equity Valuation: Determining the value of a company’s shares. It’s like assessing the worth of a rare gemstone, ensuring investors pay a fair price for a piece of the treasure.
Financial Leverage: Using debt to amplify returns on investment. It’s like using a lever to lift a heavy object, increasing force but also risk.
Forecast Model: A crystal ball for your finances, projecting future performance based on past and present data. It’s your guide through the financial wilderness, helping you navigate with confidence.
Operating Model: A detailed blueprint of how a business generates value, mapping out operational activities and their financial impact. It’s like laying out the inner workings of a clock, ensuring every gear turns smoothly.
Revenue Growth Model: This tracks potential increases in sales over time, charting a course for expansion. It’s like plotting your ascent up a mountain, anticipating the effort required to reach the summit.
Markets: Last week’s market bloodbath will go down in the history books. The S&P 500’s 10% plunge on Thursday and Friday, after President Trump announced massive tariffs, ranks among the steepest two-day decline in the last 70 years, on par with Black Monday in 1987, the post-Lehman Brothers rout in 2008, and the Covid plunge in March 2020. More than $6 trillion was wiped out from stocks over two days, and the NASDAQ entered a bear market, down 20% from a previous high.
Trading restarted at 9:30 am ET for what Bill Ackmanpredicts will be “one of the more interesting days in our country’s economic history.”
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Monday Crash?
On the other hand, CNBC host and market commentator Jim Cramer just warned that America is in store for another “Black Monday” market crash similar to the record 1987 collapse if President Trump doesn’t curtail his tariff plan.
Cramer — who noted that the 1987 crash saw the Dow Jones Industrial Average fall by 22.6% in a single day — said the bloodbath could be repeated after the brutal two-day sell-off following the announcement of Trump’s sweeping tariffs against nearly 90 countries.
If the president doesn’t try to reach out and reward these countries and companies that play by the rules, then the 1987 scenario … the one where we went down three days and then down 22% on Monday, has the most cogency,” Cramer said on his show Saturday, referencing the worst single-day fall in the history of the Dow.
A hedge fund is a limited partnership of private investors whose money is pooled and managed by professional fund managers. These managers use a wide range of strategies, including leverage (borrowed money) and the trading of nontraditional assets, to earn above-average investment returns. A hedge fund investment is often considered a risky, alternative investment choice and usually requires a high minimum investment or net worth. Hedge funds typically target wealthy investors.
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My stock broker is telling me about a “wrap-fee” program involving a hedge fund manager.
QUESTION: What is a Wrap Fee?
A wrap fee program is a service that provides investment advice and portfolio management to clients for one all-inclusive fee. The fee pays for the services provided to the client, including but not limited to securities transactions, portfolio management, research, brokerage, and administrative services. Wrap fee programs also provide an understanding of a client’s financial goals and objectives; research and selection of assets; implementation of investment decisions; account statements, and access to real-time financial data.
The Investment Advisers Act of 1940 regulates investment advisors when they offer these wrap fee programs and requires them to provide comprehensive disclosure documents before investing. This act helps ensure clients have access to all important information that affects their investment decisions.
QUESTION: Why do I need my stock broker? Can I just go directly to the hedge fund manager?
Yes, you can, but you may find a different fee arrangement when you reach the hedge fund manager, and you may be participating in an unethical transaction. When hedge fund managers set up separate accounts for wrap-fee clients, they agree to take a set fee in exchange for managing this money. They also enter into agreements with one or more brokers to help market this aspect of their money management business. A portion of the wrap fee you pay goes to the broker, and a portion goes to the manager. Incentive compensation is not generally used.
When approached directly, hedge fund managers will typically offer only the hedge fund, complete with incentive compensation and pooled investment features. However, if the hedge fund manager is willing to set up a separate account, it is possible that the investor will find the set fee much less than what he or she would have paid in a wrap fee account through a broker.
Finally, the very large caveat to all this is that the ethics of a hedge fund manager who steals clients from brokers with whom he has a marketing relationship ought to be called into question. And when it comes to hedge funds, the ethics of the manager are of paramount importance.
Posted on April 3, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
BREAKING NEWS – MARKET VOLATILITY
By Staff Reporters
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US stocks nosedived on Thursday, with the Dow tumbling more than 1,200 points as President Trump’s surprisingly steep “Liberation Day” tariffs sent shock waves through markets worldwide. The tech-heavy NASDAQ Composite (IXIC) led the sell-off, plummeting over 4%. The S&P 500 (GSPC) dove 3.7%, while the Dow Jones Industrial Average (^DJI) tumbled roughly 3%. [ongoing story].
So, does the traditional 60 stock / 40 bond strategy still work or do we need another portfolio model?
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The 60/40 strategy evolved out of American economist Harry Markowitz’s groundbreaking 1950s work on modern portfolio theory, which holds that investors should diversify their holdings with a mix of high-risk, high-return assets and low-risk, low-return assets based on their individual circumstances.
While a portfolio with a mix of 40% bonds and 60% equities may bring lower returns than all-stock holdings, the diversification generally brings lower variance in the returns—meaning more reliability—as long as there isn’t a strong correlation between stock and bond returns (ideally the correlation is negative, with bond returns rising while stock returns fall).
For 60/40 to work, bonds must be less volatile than stocks and economic growth and inflation have to move up and down in tandem. Typically, the same economic growth that powers rallies in equities also pushes up inflation—and bond returns down. Conversely, in a recession stocks drop and inflation is low, pushing up bond prices.
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But, the traditional 60/40 portfolio may “no longer fully represent true diversification,” BlackRock CEO Larry Fink writes in a new letter to investors.
Instead, the “future standard portfolio” may move toward 50/30/20 with stocks, bonds and private assets like real estate, infrastructure and private credit, Fink writes.
Here’s what experts say individual investors may want to consider before dabbling in private investments.
It may be time to rethink the traditional 60/40 investment portfolio, according to BlackRock CEO Larry Fink. In a new letter to investors, Fink writes the traditional allocation comprised of 60% stocks and 40% bonds that dates back to the 1950s “may no longer fully represent true diversification.“
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit a RFP for speaking engagements: MarcinkoAdvisors@outlook.com
Posted on March 25, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
US stocks closed near session highs on Monday as investors welcomed reports that the next wave of President Trump’s tariffs will be narrower than expected.
The S&P 500 (^GSPC) rose almost 1.8% on the heels of the broad benchmark snapping a four-week losing streak. The Dow Jones Industrial Average (^DJI) advanced 1.4%, while contracts on the tech-heavy NASDAQ Composite (^IXIC) led the gains, up 2.3%.
SO – HOW MUCH IS A “FINANCIAL ADVISOR” REALLY WORTH?
This blog holds a rather uncomplimentary opinion of financial advisors, and the financial services and brokerage industry as a whole; deserved, or not? The entire site hints at this attitude as well, in favor of a going it alone or ME, Inc investing when possible. Nevertheless, it is reasonable to wonder how much boost in net-returns might an educated and informed, fee transparent and honest, fiduciary focused “financial advisor” add to a clients’ investment portfolio; all things being equal [ceteris paribus].
And, can it be quantified?
Well, according to Vanguard Brokerage Services®, perhaps as much as 3%? In a decade long paper from the Valley Forge, PA based mutual fund and ETF giant, Vanguard said financial advisors can generate returns through a framework focused on five wealth management principles:
• Being an effective behavioral coach: Helping clients maintain a long-term perspective and a disciplined approach is arguably one of the most important elements of financial advice. (Potential value added: up to 1.50%).
• Applying an asset location strategy: The allocation of assets between taxable and tax-advantaged accounts is one tool an advisor can employ that can add value each year. (Potential value added: from 0% to 0.75%).
• Employing cost-effective investments: This component of every advisor’s tool kit is based on simple math: Gross return less costs equals net return. (Potential value added: up to 0.45%).
• Maintaining the proper allocation through rebalancing: Over time, as investments produce various returns, a portfolio will likely drift from its target allocation. An advisor can add value by ensuring the portfolio’s risk/return characteristics stay consistent with a client’s preferences. (Potential value added: up to 0.35%).
• Implementing a spending strategy: As the retiree population grows, an advisor can help clients make important decisions about how to spend from their portfolios. (Potential value added: up to 0.70%).
Source: Financial Advisor Magazine, page 20, April 2014.
Assessment
However, Vanguard notes that while it’s possible all of these principles could add up to 3% in net returns for clients, it’s more likely to be an intermittent number than an annual one because some of the best opportunities to add value happen during extreme market lows and highs when angst or giddiness [fear and greed] can cause investors to bail on their well-thought-out investment plans.
And, is the study applicable to doctors and allied healthcare providers? Doe Vanguard have a vested interest in the topic. What about fee based versus fee-only financial advice?
Conclusion
Finally, recognize the plethora of other financial planning life-cycle topics addressed in this ME-P were not included in the Vanguard investment portfolio-only study a decade ago.
And what about today with contemporaneous internet advising, chat-rooms, linkedin, robo-advisors, reddit and the like?
Posted on March 13, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters and IRS
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Straddles: A straddle is any set of offsetting positions on personal property. For example, a straddle may consist of a purchased option to buy and a purchased option to sell on the same number of shares of the security, with the same exercise price and period.
Personal property.
This is any actively traded property. It includes stock options and contracts to buy stock but generally does not include stock.
Straddle rules for stock.
Although stock is generally excluded from the definition of personal property when applying the straddle rules, it is included in the following two situations.
The stock is of a type that is actively traded, and at least one of the offsetting positions is a position on that stock or substantially similar or related property.
The stock is in a corporation formed or availed of to take positions in personal property that offset positions taken by any shareholder.
Note
For positions established before October 22, 2004, condition 1 above does not apply. Instead, personal property includes stock if condition 2 above applies or the stock was part of a straddle in which at least one of the offsetting positions was:
An option to buy or sell the stock or substantially identical stock or securities,
A securities futures contract on the stock or substantially identical stock or securities, or
A position on substantially similar or related property (other than stock).
Position
A position is an interest in personal property. A position can be a forward or futures contract or an option.
An interest in a loan denominated in a foreign currency is treated as a position in that currency. For the straddle rules, foreign currency for which there is an active inter bank market is considered to be actively traded personal property.
Offsetting position
This is a position that substantially reduces any risk of loss you may have from holding another position. However, if a position is part of a straddle that is not an identified straddle, do not treat it as offsetting to a position that is part of an identified straddle.
Presumed offsetting positions
Two or more positions will be presumed to be offsetting if:
The positions are established in the same personal property (or in a contract for this property), and the value of one or more positions varies inversely with the value of one or more of the other positions;
The positions are in the same personal property, even if this property is in a substantially changed form, and the positions’ values vary inversely as described in the first condition;
The positions are in debt instruments with a similar maturity, and the positions’ values vary inversely as described in the first condition;
The positions are sold or marketed as offsetting positions, whether or not the positions are called a straddle, spread, butterfly, or any similar name; or
The aggregate margin requirement for the positions is lower than the sum of the margin requirements for each position if held separately.
Related persons
To determine if two or more positions are offsetting, you will be treated as holding any position your spouse holds during the same period. If you take into account part or all of the gain or loss for a position held by a flow-through entity, such as a partnership or trust, you are also considered to hold that position.
Some Stupid Things Financial Advisors Say to Physician Clients
A few years ago and just for giggles, colleague Lon Jefferies MBA CFP® and I collected a list of dumb-stupid things said by some Financial Advisors to their doctor, dentist, nurse and and other medical professional clients, along with some recommended under-breath rejoinders:
“They don’t have any debt except for a mortgage and student loans.” OK. And I’m vegan except for bacon-wrapped steak.
“Earnings were positive before one-time charges.” This is Wall Street’s equivalent of, “Other than that Mrs. Lincoln; how was the play?”
“Earnings missed estimates.” No. Earnings don’t miss estimates; estimates miss earnings. No one ever says “the weather missed estimates.” They blame the weatherman for getting it wrong. Finance is the only industry where people blame their poor forecasting skills on reality.
“Earnings met expectations, but analysts were looking for a beat.” If you’re expecting earnings to beat expectations, you don’t know what the word “expectations” means.
“It’s a Ponzi scheme.” The number of things called Ponzi schemes that are actually Ponzi schemes rounds to zero. It’s become a synonym for “thing I disagree with.”
“The [thing not going perfectly] crisis.” Boy who cried wolf, meet analyst who called crisis.
“He predicted the market crash in 2008.” He also predicted a crash in 2006, 2004, 2003, 2001, 1998, 1997, 1995, 1992, 1989, 1984, 1971…
“More buyers than sellers.” This is the equivalent of saying someone has more mothers than fathers. There’s one buyer and one seller for every trade. Every single one.
“Stocks suffer their biggest drop since September.” You know September was only six weeks ago, right?
“We’re cautiously optimistic.” You’re also an oxymoron.
[Guy on TV]: “It’s time to [buy/sell] stocks.” Who is this advice for? A 20-year-old with 60 years of investing in front of him, or a 82-year-old widow who needs money for a nursing home? Doesn’t that make a difference?
“We’re neutral on this stock.” Stop it. You don’t deserve a paycheck for that.
“There’s minimal downside on this stock.” Some lessons have to be learned the hard way.
“We’re trying to maximize returns and minimize risks.” Unlike everyone else, who are just dying to set their money ablaze!
“Shares fell after the company lowered guidance.” Guys, they just proved their guidance can be wrong. Why are you taking this new one seriously?
“Our bullish case is conservative.” Then it’s not a bullish case. It’s a conservative case. Those words mean opposite things.
“We look where others don’t.” This is said by so many investors that it has to be untrue most of the time.
“Is [X] the next black swan?” Nassim Taleb’s blood pressure rises every time someone says this. You can’t predict black swans. That’s what makes them dangerous.
“We’re waiting for more certainty.” Good call. Like in 1929, 1999 and 2007, when everyone knew exactly what the future looked like. Can’t wait!
“The Dow is down 50 points as investors react to news of [X].” Stop it – you’re just making stuff up. “Stocks are down and no one knows why” is the only honest headline in this category.
“Investment guru [insert name] says stocks are [insert forecast].” Go to Morningstar.com. Look up that guru’s track record against their benchmark. More often than not, their career performance lags an index fund. Stop calling them gurus.
“We’re constructive on the market.” I have no idea what that means. I don’t think you do, either.
“[Noun] [verb] bubble.” (That’s a sarcastic observation from investor Eddy Elfenbein.)
“Investors are fleeing the market.” Every stock is owned by someone all the time.
“We expect more volatility.” There has never been a time when this was not the case. Let me guess, you also expect more winters?
“This is a strong buy.” What do I do with this? Click the mouse harder when placing the order in my brokerage account?
“He was tired of throwing his money away renting, so he bought a house.” He knows a mortgage is renting money from a bank, right?
“This is a cyclical bull market in a secular bear.” Vapid nonsense.
“Will Obamacare ruin the economy?” No. And get a grip.
So, don’t let these aphorisms blind you to the critical thinking skills you learned in college, honed in medical school and apply every day in life.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit a RFP for speaking engagements: CONTACT: MarcinkoAdvisors@outlook.com
Posted on March 11, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
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US stocks plunged on Monday as investors processed growing concerns about the health of the US economy after President Trump and his top economic officials acknowledged the possibility of a potential rough patch.
The Dow Jones Industrial Average (^DJI) fell nearly 900 points, or over 2%, while the benchmark S&P 500 (^GSPC) dropped around 2.7% after the index posted its worst week since September. The tech-heavy NASDAQ Composite (^IXIC) fell 4% in its worst day since 2022, as the “Magnificent Seven” stocks led the sell-off. Tesla’s (TSLA) rout continued, plunging 15% and officially wiping out the gains it had made in the wake of Trump’s election win. Nvidia (NVDA), Apple (AAPL), Google parent Alphabet (GOOG), and Meta (META) all each lost more than 4%.
Key inflation data includes the Consumer Price Index (CPI) and Producer Price Index (PPI) on Wednesday and Thursday could help set the tone, though economic growth concerns seem to have replaced inflation as the prime concern. The S&P 500 index (SPX) dropped more than 3% last week, the worst performance since September.
However, the U.S. economy “is in a good place” despite recent policy uncertainty, Federal Reserve Chairman Jerome Powell said Friday. He sees no need to hurry rate cuts until there’s more policy clarity, Bloomberg reported. Stocks rallied on Powell’s words late Friday, but Monday’s early action indicates that rallies continue being sold, and the Cboe Volatility Index (VIX) rose above 26 as investors piled into risk-off assets like bonds. The 200-day moving average of 5,734 for the SPX remains a key technical support area, and the SPX was on pace to open below that Monday, now more than 6% off of all-time highs but not yet in –10% correction territory.
I was having lunch with a close friend of mine. He mentioned that he had accumulated a significant sum of money and did not know what to do with it. It was sitting in bonds, and inflation was eating its purchasing power at a very rapid rate.
He is a dentist and had originally thought about expanding his business, but a shortage of labor and surging wages turned expanding into a risky and low-return investment. He complained that the stock market was extremely expensive. I agreed.*
He said that the only thing left was residential real estate. I pushed back. “What do you think will happen to the affordability of houses if – and most likely when – interest rates go up? Inflation is now 6%. I don’t know where it will be in a year or two, but what if it becomes a staple of the economy? Interest rates will not be where they are today. Even at 5% interest rates [I know, a number unimaginable today] houses become unaffordable to a significant portion of the population. Yes, borrowers’ incomes will be higher in nominal terms, but the impact of the doubling of interest rates on the cost of mortgages will be devastating to affordability.”
He rejoined, “But look at what happened to housing over the last twenty years. Housing prices have consistently increased, even despite the financial crisis.”
I agreed, but I qualified his statement: “Over the past twenty, actually thirty, years interest rates declined. I honestly don’t know where interest rates will be in the future. But probabilistically, knowing what we know now, the chances that they are going to be higher, much higher, are more likely than their staying low. Especially if you think that inflation will persist.”
We quickly shifted our conversation toward more meaningful topics, like kids.
It seems that every year I think we have finally reached the peak of crazy, only to be proven wrong the next year. The stock market and thus index funds, just like real estate, have only gone one way – up. Index funds became the blunt instrument of choice in an always-rising market. So far, this choice has paid off nicely.
The market is the most expensive it has ever been, and thus future returns of the market and index funds will be unexciting. (I am being gentle here.)
You don’t have to be a stock market junkie to notice the pervasive feeling of euphoria. But euphoria is a temporary, not a permanent emotion; and at least when it comes to the stock market, it is usually supplanted by despair. Market appreciation that was driven by expanding valuations was not a gift but a loan – the type of loan that must always be paid back with a high rate of interest.
I don’t know what straw will break the feeble back of this market or what will cause the music to stop (there, you got two analogies for the price of none). We are in an environment where there are very few good options. If you do nothing, your savings will be eaten away by inflation. If you do something, you find that most assets, including the stock market as a whole, are incredibly overvalued.
We are doing the only sensible thing that you can do today. We spend very little time thinking about straws or what will cause the music to stop or how overvalued the market is. We are focusing all our energy on patiently building a portfolio of high-quality, cash-generative, significantly undervalued businesses that have pricing power.
This has admittedly been less rewarding than taking risky bets on unimaginably expensive assets. It may lack the excitement of sinking money into the darlings you see in the news every day, but we hope that our stocks will look like rare gems when the euphoria condenses into despair. As we keep repeating in every letter, the market is insanely overvalued. Our portfolio is anything but – we don’t own “the market”.
*A question may arise:Why did I not tell my dentist friend to pick individual stocks? He runs a busy dental practice and wouldn’t have the time or the training to pick stocks.
Why didn’t I offer him our services? IMA manages all my and my family’s liquid assets, but I have a rule that I never (ever!) break – I don’t manage my friends’ money. I’ll help them as much as possible with free advice but will never have a professional relationship with them. I intentionally create a separation between my personal and professional lives. After a difficult day in the market, I want to be able to go for beers with friends and leave the market at the office.
Also, this simplifies my relationships with my friends. There is no ambiguity in our friendship.
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STUPID COMMENTS: Financial Advisors Say to Physician Clients
BY DR. DAVID EDWARD MARCINKO; MBA MEd CMP®
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SPONSOR: http://www.MarcinkoAssociates.com
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Some Stupid Things Financial Advisors Say to Physician Clients
A few years ago and just for giggles, colleague Lon Jefferies MBA CFP® and I collected a list of dumb-stupid things said by some Financial Advisors to their doctor, dentist, nurse and and other medical professional clients, along with some recommended under-breath rejoinders:
So, don’t let these aphorisms blind you to the critical thinking skills you learned in college, honed in medical school and apply every day in life.
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EDUCATION: Books
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit a RFP for speaking engagements: CONTACT: MarcinkoAdvisors@outlook.com
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